Topic: Hindu and Confucian Legal Traditions
Thread: Explain 2 similarities and 2 differences between the Hindu and Confucian Legal Traditions.
Please write between 350 to 550 words and include at least 1 scholarly source other than the course materials. All sources must be cited in current Bluebook (footnotes) format and incorporate a Judeo-Christian worldview/analysis and biblical principles in the paper. NOTE: You will be expected to incorporate multiple sources (at least 3), your textbook (H. Patrick Glenn. Legal Traditions of the World (5th ed. 2014). ISBN: 9780199669837), and the Bible into your essay. This means you must have at least 3 different sources incorporated into your essay. Each one of these sources should be cited using the Bluebook citation method.
In the past, air travel was expensive. In Thailand, People who wished to travel by air had only a few options. There was only Thai Airways for domestic route and a few competitor airlines for international routes, which they were all Full Service Carriers. The air fares were about the same as Thai Airways’. People with low income had almost no chance to experience air travel.
A significant change took place in 2001, Thai airline industry was gradually deregulated (Zhang, Hanaoka, Inamura, & Ishikura, 2008). The result of airline deregulation led to emergence of Low Cost Carriers (LCCs). The competition between airlines has become increasingly intense. There are researches about LCCs in Thailand and other member states of Association of Southeast Asian Nations (ASEAN), also the impact of airline deregulation in ASEAN, which will be discussed in this literature review. The literature review is divided into 3 key points. First is Airline deregulation, second is the impact of airline deregulation and the last is the emergence of LCCs.
The airline deregulation has been a controversial topic in the Thai society since its beginning. As the person who brought this idea was the former prime minister Thaksin Shinawatra, amid the political turmoil in Thailand. It had brought criticism among Thai politicians. The oppositions tried to bright out the disadvantages that could have happened to the state-owned FSC (Thai Airways). The Thai government had taken a long consideration time before passing the law.
According to (Zhang et al., 2008), In the past, private airlines were prohibited by Thai’s Department of Civil Aviation (DCA) from operating on the same route with state-owned FSC, to protect Thai Airways from its competitors. After a long wait, the DCA has decided to deregulate the airline industry. The airline deregulation includes
1. Entry deregulation, which means private airlines were allowed to operate any domestic routes.
2. Fare deregulation means that airlines were allowed to set their own fares without limitation.
3. Foreign ownership deregulation: the foreign-shareholding ceiling was raised from 30 percent to 49 percent (Zhang et al., 2008).
Since Thailand is one of the ASEAN members, the action plan for Air Transport Integration and Liberalisation within ASEAN called ASEAN Single Aviation Market (ASAM) has started from 2005 to 2015. The agreement is to remove the limitations on 3rd, 4th and 5th freedom of the air within ASEAN. The 3rd, 4th freedom of the air were deregulated at the end of 2008 and 5th freedom of the air was in 2010 (Thomas, Stone, Tan, Drysdale, & McDermott, 2008).
After the Thai airline deregulation in 2001, many LCCs have emerged in Thai airline industry. For Thai people, the airline deregulation had brought freedom of choice to the way they travel. LCCs offer lower air fare, which attracts number of new passengers. People who had never traveled by plane before, had a chance to experience air travel for the first time.
Comparison of the impact in U.S. and ASEAN
(Williams, 1994) wrote that, before the time of airline deregulation in United States, the tight regulation had resulted in an insufficient, stultified scheduled airline industry. A major concern of those regulating the industry had been to protect license holders, with comparatively little regard being given to matters of efficiency or the interest of consumers.
The expectation of airline deregulation was that, it would bring economic efficiency, competitive and consumer oriented to the marketplace. Since the entry barriers is no longer exist, new airlines can establish operations on any route they want to choose. The result is, the high cost incumbent airlines would have to adapt and cut down their expenses, or else they would be forced out of business (Williams, 1994).
(Williams, 1994) wrote that after the Airline Deregulation act of 1978 in the United states, trunk airlines responded by changing their strategy, by trying to reduce operating cost and enhance their competitiveness. Before the time of airline deregulation, trunk carriers operated mostly with point-to-point system. But after, airlines changed their route structures to “hub and spoke” system. Which decrease operating cost. Major airlines stop their operations in the short routes.
(Williams, 1994) Added that, the removal of price regulation has brought a significant change to airline industry. Major carriers developed frequent-flyer program in order to create brand royalty. Network size is the important factor for travelers as to which program they are going to participate. The larger carriers were the main beneficial.
Before 1984, (Williams, 1994) explained that, there were a few code-sharing alliances formed between large carriers and commuter airlines. Soon after the occurrence of airline deregulation, by the mid 1986 all of the 12 major carriers and 4 of the national airlines in the United states had joined into code sharing alliances with operators of commuter services. Nearly all of the largest 50 commuter service had formed code-sharing alliance with major carriers. Carriers participated these agreements accounted for over 75 percent of the passengers carried by the whole of the commuter airline industry. As mentioned, the airline deregulation has made a massive change to the way pre-existing airlines run their business. It created instability in the business and encourage competition among airlines.
In (Fu, Oum, & Zhang, 2010)’s research on Air transport liberalization and its impact, they have conducted a study from various sources such as reports, research paper from academia, governments and industries. All the information they collected have confirmed, that Airline deregulation has led to substantial economic and traffic growth. The competitive pressure forced airlines to improve their productivity and drop air fares. According to the comparison between air service prices and other goods and services in 1978, 1990 and 2006 they have suggested in the research. This statistic comparison table gives an insight of how fierce the competition is in the U.S. airline industry. As the LCCs expand or the economy grows, it creates more job opportunities, trade promotions, better transport and logistic services will be created. Countries are adopting airline deregulation, which means that they benefited from airline deregulation in general. The fast growth of LCCs leads to increased competition and reduced fare. which will automatically stimulate traffic.
(Fu et al., 2010) explained about the effects of hub and spoke airline network competition. They suggested that, there are literatures about hubbing and its effects. According to (Fu et al., 2010) accumulated data, hubbing has effects on many aspects such as, travel time, passenger’s demand, delay time and so on. In 2006, around 20 percent of passengers chose to fly a connecting flight than direct flight due to many reasons, such as flight frequency, its lower price or the benefit of staying-over at the hub country. (Fu et al., 2010) explain that in 1978, major US carriers began to plan their hub-and-spoke network to strengthen hub dominance and expand the market coverage.
(Hanaoka, Takebayashi, Ishikura, & Saraswati, 2014) conducted a study on the impact of liberalization policy on competition between LCCs and FSCs in ASEAN. They suggested that ASEAN is still learning from U.S. history. In some countries the market has already been deregulated, and it will eventually be liberalized. But even if it is deregulated, there is still limitation for foreign share-holders in some countries including Thailand. In the research, (Hanaoka et al., 2014) added that the emergence of LCCs in ASEAN is similar to the U.S. and the impact of it is also similar, according to the statistic they have analyzed. The main difference is that ASEAN has not been fully liberalized. (Hanaoka et al., 2014) explained that establishment of the joint-ventures in ASEAN region is possible and remain attractive due to the market’s potential to grow. LCCs considerably decrease FSC’s profit. FSCs can lose their customers by the entry of one LCC, and the entry of one LCC can affect the whole network on fare, frequency and profitability. Most intra-ASEAN routes are shorter than 4 hours, it may benefit LCCs more than FSCs.
Emergence of LCCs
(Zhang et al., 2008) explained that LCCs are no frills airlines that focus on cost leadership, rather than service experience. LCCs share the same strategies adopted from Southwest airline which are 1) They operate in a single class without any unnecessary services. 2) They operate in short or medium point-to-point service. 3) They operate in high efficiency and with maximum aircraft utilization. 4) They try to reduce fixed cost. 5) They have low distribution cost. 6) They operate with a single aircraft type.
In The airline business in the 21st century book, (Doganis, 2001) wrote that Southwest airlines offers low and unrestricted fare with high frequencies. The Southwest Chairman and CEO Herb Kelleher stated that Southwest is not competing with other airlines, but they are competing with ground transportation. The LCC business model is up to 50 percent lower in operating cost compared to FSCs. LCCs have grown and expanded their fleet much faster than the traditional airlines. This message gives an insight that an emergence of LCCs can affect other form of transportations as well.
Before the airline deregulation in Thailand, there was only Thai Airways, who can operate in domestic market. Private airlines were not allowed to enter any domestic routes. Private carriers have been restricted from operating directly in competition with Thai Airways (Zhang et al., 2008).
After the airline deregulation in Thailand, LCCs have emerged and took over the Thai domestic airline market. As a result, the competition among LCCs itself and between LCCs and FSCs has become more intense. In Thailand, domestic travel with LCCs has been increasing since then. With the substantial difference in price, the LCCs were able to attract first time travelers, by about 30 to 40 percent of all passengers (Thanasupsin, Chaichana, & Pliankarom, 2010).
The airline deregulation led to the emergence of One-Two-Go. It operates in Thai domestic routes with larger aircrafts than its competitors. Unfortunately, One-Two-Go’s lack of safety standard led to its suspension in 2008 by the government (Zhang et al., 2008).
Nok Air is a joint-venture LCC set by Thai Airways. But unlike other LCCs, Nok Air also offers Nok-Plus, a business class seats service. Nok Air considers itself as a premium LCC (Zhang et al., 2008).
Thai Lion Air is an offshoot of Indonesia’s Lion Air Group. M2 PRESSWIRE reported on 5 December 2013 that, “being part of Indonesian Lion Group means that this is a very serious rival not just the major LCCs in Thailand but also most other major airlines in the region” (“Thai Lion Air Takes Off,” 2013).
Thai Smile is a subsidiary of Thai Airways itself in objective to compete with LCCs in Thailand. Thai Smile positioned itself as a “Light premium” regional airline. It is still a FSC serves regional routes. Thai Smile operates with all Airbus A-320 aircraft. The carrier will offer both Business class and economy class seats as well as in-flight meals. Baggage allowance will be between 15-20kgs. It is kind of hybrid between FSC and LCC strategy (“Thailand: Thai Airways International to launch Thai Smile airline,” 2011).
Thai AirAsia is a joint-venture between AirAsia and The Former Prime Minister Thaksin Shinawatra’s Shin Corporation established in January 2004. Thai AirAsia launched its operation in February 2004 (Zhang et al., 2008). Nowadays, Thai AirAsia operates domestic and international flights to 13 regional destinations and 10 international destinations. It is headquartered in Bangkok (Thai AirAsia Co., Ltd. – Company Capsule, 2014).
There are researches about Thai travelers’ perception of LCC and factors that influenced Thai travellers’ selection. They showed that the airfare is the main factor that influence the majority of Thai people. (Thanasupsin et al., 2010) collected their data by conducted a survey of 2,000 airline passengers at Donmuang International Airport. to find out the answer to their research.
From their socioeconomic data, the LCCs attracts lower income travelers compare to FSCs. While age of both types of airline passengers is not the factor. On the other hand, one significant difference between FSC and LCC passengers is the occupation. The government officers are able to fly with Thai Airways (which is also state-owned) without any charge. The result is Thai Airways passengers who are government officers is double that of LCCs. (Thanasupsin et al., 2010) also mentioned that over 51.64 percent of LCC passengers have experienced intercity buses before the emergence of LCCs, and LCCs seem to be much better in every aspect. Such as, it takes a lot less travel time, its punctuality, its safety. This means that ground transportation in Thailand is also affected by the emergence of LCCs, same as previously happened in United States. As the LCCs price competition become more intense, the more effect will be given to ground transportation.
Although LCCs are dominating the domestic market, but there is still room for FSCs on international market. Which FSC operators need to figure out how to adapt and survive in this fierce competitive industry.
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